Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 27th March 2020
Most power and gas contracts fell again this week, as a declining global economy has begun to reflect more heavily onto the UK energy market. A decline in forecast consumption and high than expected temperatures has seen day-ahead gas fall 22.6% to 19.05p/th, reaching more than a 10-year low on 27 March. Day-ahead power fell 5.7% to £29.00/MWh as declining industrial consumption pressed on prices. Slight backwardation was shown in gas prices, as April 20 gas was down 18.1% at 18.81p/th, and May 20 gas decreased 17.8% to 18.32p/th. Most seasonal gas contracts declined last week, down by 3.7% on average, while both summer 20 and winter 20 gas dropped 14.6% and 3.9% respectively, subsiding to 19.75p/th and 32.94p/th. All seasonal power contracts declined this week, down on average by 3.5%, as summer 20 power decreased 9.6% to £28.35/MWh, while winter 20 fell 3.0% to £39.05/MWh. Brent crude oil fell by 8.2% to $26.79/bl as action taken by central banks around the world was enough to lift global equity markets, but failed to have any lasting effect on oil prices, which continue to fall on market concerns over future demand for the commodity. EU ETS carbon slipped by 6.9% to average €16.32/t, despite rising to near €17/t late on in the week as prices followed oil movements. API 2 coal bucked the trend seen by other commodities and climbed by 2.7% to $57.16/t.
Energy Wholesale Market Review Week Ending 27th March 2020
Energy Wholesale Market Review Week Ending 20th March 2020
Most power and gas contracts fell this week on declining demand and above seasonal normal temperatures. Day-ahead gas fell 5.4% to 24.60p/th despite a general undersupplied system this week on lowered LNG send-out. Day-ahead power fell 15.8% to £30.75/MWh, despite rising to above £37.00/MWh midweek, with highly fluctuating wind generation the driver behind such changes. April 20 gas was down 7.1% at 22.98p/th, and May 20 gas decreased 9.2% to 22.28p/th. All seasonal gas contracts declined last week, down by 4.1% on average, while both summer 20 and winter 20 gas dropped 7.7% and 4.2% respectively, subsiding to 23.14p/th and 34.26p/th. All seasonal power contracts declined this week, down on average by 6.9%, as summer 20 power decreased 10.6% to £31.36/MWh, while winter 20 fell 7.6% to £40.25/MWh. Brent crude oil fell 17.9% to average $29.17/bl as oil prices dropped to their lowest levels seen for 17 years of $26.33/bl on 19 March as the price dispute between Russia and Saudi Arabia continues. EU ETS carbon slipped by 24.4% to €17.53/t as demand for allowances dropped due amid the coronavirus outbreak. API 2 coal climbed by 0.3% to $55.67/t as demand in China begins to rise again.
Energy Wholesale Market Review Week Ending 20th March 2020
Energy Wholesale Market Review Week Ending 13th March 2020
Most near-term power and gas contracts rose this week, while longer term forward contracts declined on the expected influence of the coronavirus on consumption and the wider economy. Day-ahead gas rose 6.6% to 26.00p/th, on forecasts that temperatures will drop from the seasonally high levels seen this week. Day-ahead power rose 9.8% to £36.50/MWh, following forecasts of low wind generation next week. April 20 gas was up 11.5% at 24.74p/th, and May 20 gas increased 10.5% to 24.53p/th. Seasonal gas contracts were mixed this week, down by 0.7% on average, despite summer 20 and winter 20 gas increasing 9.5% and 0.4% to 25.06p/th and 35.78p/th, respectively. Seasonal power contracts were also mixed this week, down on average by 0.2%, as summer 20 and winter 20 climbed 4.9% and 0.8% respectively, rising to £35.08/MWh and £43.57/MWh. Brent crude oil fell 30.6% to $35.52/bl as oil prices suffered the worst crash since the Gulf war in 1991. Prices opened 26% lower at $35.57/bl on 9 March, reacting to the outcome of the OPEC meeting where Russia refused to agree to deeper cuts to oil supply. EU ETS carbon prices also followed oil and lost 2.3% to average €23.18/t this week as less oil consumption has seen a drop in demand for ETS certificates. API 2 coal followed oil and dropped, slipping 3.5% to average $55.39/t with price changes in line with global market movements.
Energy Wholesale Market Review Week Ending 13th March 2020
Energy Wholesale Market Review Week Ending 6th March 2020
Most power and gas contracts rose this week, with day-ahead power as the only exception. Day-ahead gas rose 1.7% to 24.40p/th following an increase gas demand. Day-ahead power fell 5.4% to £33.25/MWh despite reaching £43/MWh midweek as significant fluctuations in wind generation saw prices rise and fall this week. April 20 gas was up 5.1% at 22.19p/th, and May 20 gas increased 1.6% to 22.19p/th. All seasonal gas contracts boosted this week, up by 4.2% on average, while summer 20 and winter 20 gas increased 4.0% and 3.6% to 22.88p/th and 35.63p/th, respectively. All seasonal power contracts lifted this week, up on average by 2.5%, as summer 20 and winter 20 gained 2.1% and 2.5% to £33.45/MWh and £43.22/MWh, respectively. Brent crude oil fell 5.1% to $51.20/bl as the spread of the coronavirus on a global scale continues to impact stock and commodity markets. There were hopes that prices could lift on news of the outcome of the meeting of OPEC and OPEC+ allies in Vienna this week, although it appears that no agreement will be reached on deepening production cuts. API 2 coal saw marginal gains this week, rising 0.6% to average $57.40/t as lower stocks were reported at ARA terminals. EU ETS carbon prices followed oil and lost 1.3% to average €23.74/t this week, following lower demand for allowances in this week’s EU-wide auctions.
Energy Wholesale Market Review Week Ending 6th March 2020
Written By Graham Paul
